There are numerous benefits to be had by individuals, government programs, and the economy at large by incentivizing individuals to make long-term investments, and particularly to save for their own retirement. For example, a collective effort by people to save and make long-term investments can reduce the cost and increase the availability of capital for businesses, reduce financial strain on government programs for retirees, and ensure that individuals can afford medical care and maintain their lifestyle in retirement. The individual retirement account (IRA), which allows an individual to set aside and invest a certain amount of their earned income before paying taxes on that income, constitutes one of the primary investment vehicles available to incentivize long-term savings. Yet, many people do not save as much of their income as they need to, and many do not save anything at all, citing reasons as wide-ranging as inadequate cash flow to maintain a savings account, to distrust of the financial markets, to the belief that the government will take care of them through programs like Social Security.
However, despite the rhetoric describing seemingly risk-averse behavior, many individuals are quick to hazard their capital in high-risk activities such as lottery games, where nearly every participant will lose substantially all the capital they put at risk. Virtually all participants in lottery games are aware of this outcome, and yet many continue to participate on a regular basis for various reasons, including, among others, entertainment purposes, or the remote chance that they will win a substantial amount of money. The utility derived from these lottery incentives have resulted in detrimental long-term behavior when it comes to saving, to the point where, in March, 2012, the Employee Benefit Research Institute found that 60% of households had savings accounts and investments valued at under $25,000, and only 14% of individuals were “very confident” that they had enough money to live comfortably in retirement. Accordingly, improved systems and methods for encouraging the public to invest capital in investment vehicles with favorable long-term return prospects are desirable.